The joint venture company, the first of its kind in the industry, is a 60:40 split between Abbey National and Stiell. As a result of the deal Abbey is aiming to reduce costs by £3m over the next two years.
'We see it [the deal] as a model - a practical way of increasing revenue streams and generating it as an asset. This is a re-invention of the property/operating portfolio,' said Stiell head of marketing, Keith Sparshott.
Abbey has already invested £200,000 in the company, which will be known as NewCo until it is officially launched in January.
Although the deal has cost benefits, Sparshott said that the companies 'are not looking at this as a cost reduction model'. He also pointed out that Stiell does not have exclusivity for the 10-year contract period. However, it will be looked on as a preferred provider because of its links with NewCo.
Long-term the two companies plan to develop and grow NewCo into an independent service provider, which could move into the retail property sector.
'The aim is to acquire one or two new clients per year, growing the NewCo to a £40m a year business,' said Sparshott.
When asked if NewCo would go as far as taking on property, Sparshott said: 'Probably not. Being realistic our expertise is in the management of property, not the ownership of it. Property ownership would muddy the waters.'
About 70 people will move over from Abbey to Stiell and will be based near Abbey's headquarters in Milton Keynes.
Source
The Facilities Business